Hearing Panel of the Central Regional Council:
- Paul M. Moore, Chair
- Bianca Dupuis, Industry Representative
Julie Grajales, Enforcement Counsel for the Mutual Fund Dealers Association of Canada
Maurice Gary Mailloux, Respondent
I. SETTLEMENT AGREEMENT
- We accepted the settlement agreement dated April 29, 2022 (“Settlement Agreement”) between the staff of the MFDA (“Staff”) and Maurice Gary Mailloux (“Respondent”) at an electronic settlement hearing held in accordance with MFDA rules for an electronic hearing.
- A copy of the Settlement Agreement is attached to these Reasons as Schedule “1”. The agreed facts are set out in Part IV of the Settlement Agreement.
- The Respondent admits that between October 13, 2015 and October 2019, the Respondent obtained, possessed, and in some instances used to process transactions, 27 pre-signed account forms in respect of 8 clients, contrary to MFDA Rule 2.1.1.
III. PROPOSED SANCTION
- The Settlement Agreement provides that:
- the Respondent shall pay a fine of $15,000;
- the Respondent shall pay costs of $5,000; and
- the Respondent shall in the future comply with MFDA Rule 2.1.1.
- We determined that we had to be satisfied regarding three considerations before we could accept the Settlement Agreement. First, the agreed penalty had to be within an acceptable range taking into account similar cases. Secondly, the agreed penalty had to be fair and reasonable (i.e. proportional to the seriousness of the contraventions taking into consideration relevant circumstances) and should appear to be so to members of the public and industry. Thirdly, the agreed penalty should serve as a deterrent to the Respondent and to industry. To be satisfied on these three considerations required an understanding of the particular facts of the case, the circumstances of the Respondent, and the impact on the Respondent of the agreed penalty.
- The Respondent’s conduct was in violation of the standard of conduct codified by MFDA in Rule 2.1.1. This rule requires that Members and Approved Persons deal fairly, honestly, and in good faith with clients; observe high standards of ethics and conduct in the transaction of business; and refrain from engaging in any business conduct or practice which is unbecoming or detrimental to the public interest. A multitude of MFDA disciplinary cases have found conduct similar to that of the Respondent in our case to be a contravention of MFDA Rule 2.1.1.
VI. OTHER CONSIDERATIONS
- On November 15, 2019, the Member placed the Respondent on close supervision. The Respondent completed his close supervision on November 15, 2020, and paid the Member $2,400 in close supervision fees.
- There was no evidence that the Respondent received any benefit from the conduct set out above beyond the commissions or fees he would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
- There was no evidence of client complaints, client loss or lack of client authorization.
- The Respondent has not previously been the subject of MFDA disciplinary proceedings.
- By entering into this Settlement Agreement, the Respondent has saved the MFDA the time, resources, and expenses associated with conducting a full hearing on the allegations.
- The agreed penalties are within the recommendations of the MFDA Sanction Guidelines and the reasonable range of appropriateness with regard to MFDA decisions submitted to us by Staff, made by MFDA Hearing Panels in similar circumstances. They are fair and reasonable and will serve as a specific and general deterrent.
- The costs award is reasonable.
- We concluded that the Settlement Agreement was in the public interest and, consequently, we accepted it.
Paul M. MoorePaul M. MooreChair
Bianca DupuisBianca DupuisIndustry Representative